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Balanced Funds Aren't
Always as Safe as They Seem

By

Mary KisselStaff Reporter of THE WALL STREET JOURNAL

Updated Aug. 15, 2003 12:01 a.m. ET

If you're thinking about investing in a so-called balanced fund, make sure you do your homework: The investment strategies of these funds can vary widely, and they're not always as safe a bet as they seem.

Balanced funds, also known as "asset allocation" or "distribution" funds, are loosely defined as funds that invest in a mixture of stocks, bonds, cash and sometimes property. They bill themselves as providing investors with a ready-made diversified portfolio, and on average they have lower volatility,...